NCUA Releases Fair Lending Compliance Tools

The NCUA on Tuesday released a letter to credit unions that details the regulator’s new fair lending tools it hopes will help federal credit unions comply with fair lending laws. The letter also explains the factors used to determine which federal credit unions will receive a fair lending exam or offsite supervision contact.

Although the NCUA did not issue fair lending laws, the regulator said it does supervise and enforce the rules, including the Equal Credit Opportunity Act, the Home Mortgage Disclosure Act and the Fair Housing Act.

As in past years, the NCUA will select some federal credit unions to receive a fair lending examination.

“Federal credit unions that willbe selected for a fair lending exam or offsite supervision contact will have demonstrated the potential for a higher fair lending risk,” NCUA Chairman Debbie Matz said in the letter.

Factors used to select credit unions for the exam include lending practices that fall outside normal terms for pricing, denial, withdrawal or lending terms, according to the credit union’s annual Home Mortgage Disclosure Report.

The agency will also look for fair lending violations, general compliance risks and other factors, such the potential for higher fair lending risk due to mortgage volume, loan types or complexity.

In addition to an onsite exam, the NCUA said federal credit unions that demonstrate the potential for higher fair lending risk, but are not HMDA outliers, could be subjected to an offsite fair lending supervision contact.

“If an offsite supervision contact indicates the possibility of discriminatory practices or significant findings of non-compliance with fair lending laws or regulations, a federal credit union will be considered for a fair lending exam during the next exam cycle,” Matz said.

The letter also introduces a new Fair Lending Guide, developed by the NCUA’s Office of Consumer Protection. The NCUA also announced it has scheduled a free webinar on the topic for Thursday, April 4, at 1 p.m. EDT.

During the webinar, OCP Director Gail Laster and OCP staff will review the NCUA’s fair lending examination program and the new lending guide, and will share fair lending best practices for credit unions. Registration is open and available online.

Participants may submit questions via email in advance to WebinarQuestions@ncua.gov with the subject line “Fair Lending Webinar”.